Market regulator Securities and Exchange Board of India (SEBI) has announced several new changes to make investing and trading easier in India.
These updates mainly focus on reducing costs, improving flexibility, and encouraging more participation from investors.
Here’s a simple breakdown of what’s changing and why it matters.
Big relief for foreign investors (FPIs)
SEBI has allowed Foreign Portfolio Investors (FPIs) to settle their trades on a net basis instead of the current gross system.
In simple terms, this means:
Earlier, FPIs had to settle each transaction separately
Now, they can settle the final net amount after adjusting all trades
This change will reduce:
Funding costs
Liquidity pressure
Losses due to currency fluctuations
The new rule will come into effect from December 31, 2026, and is expected to be especially helpful during high-volume trading events like index rebalancing.
Changes in AIF rules to reduce compliance burden
SEBI has also made changes to rules related to Alternative Investment Funds (AIFs).
Key updates include:
Allowing funds to hold liquidation proceeds even after their tenure ends
Introducing a new category called “inoperative funds”
These inoperative funds will have lighter compliance requirements, making it easier for fund managers to handle inactive or winding-up funds.
Boost for social impact investing
To attract more retail investors, SEBI has reduced the minimum investment amount in Social Impact Funds (SIFs).
This move makes it easier for individual investors to participate in funds that focus on social causes.
It also aligns investment rules with instruments like Zero Coupon Zero Principal bonds, making the system more consistent and investor-friendly.
More flexibility for InvITs and REITs
SEBI has introduced additional flexibility for infrastructure and real estate investment trusts:
InvITs can continue holding investments in SPVs even after project agreements end
Both InvITs and REITs can now invest in liquid mutual funds
This helps:
Better manage short-term funds
Reduce concentration risk
Improve overall portfolio stability
Final takeaway
SEBI’s latest decisions are aimed at making India’s financial markets more efficient and attractive.
By lowering costs, easing rules, and increasing flexibility, the regulator is trying to create a smoother experience for both domestic and foreign investors.
